Why Open A Bank Account For Your Small Business?
Basically, the best business accounts for small businesses give numerous opportunities. In particular, you can legitimize your startup, attract more customers and investors, and facilitate your cooperation with the tax service representatives. Continue reading to realize other essential reasons to open a banking account.
Separate Personal And Business Finances
When you have picked a suitable business bank account for your business, you may not worry about mixing your personal money and cash flows from your customers. Separate bank balances ensure improved bookkeeping, enabling you to follow any money exiting or entering from your account. A complete understanding of where your business stands may prevent serious financial mistakes.
Build Business Credit
As a newcomer in the business area, you may need loans for your company. In most cases, loans cannot be approved without a current business account. It should demonstrate responsible record-keeping and include the necessary information about your organization. Lenders prefer solid companies that can confirm their solvency. Business accounts can be such evidence.
Easy Expense Tracking
If you select the best online banking for small business goals, you can benefit from bookkeeping automatically synced to all your company transactions. It enables you to control budgeting, invoicing, checking up on your business health, and tracing expenses monthly or quarterly.
Gain Interest
Do you know that the best small business checking account options may provide reasonable interest for you? Let's think: you may run your business legally and earn additional profit. For instance, in the case of using Annual Percentage Yield (APY), you can grab up to 5% profit. The interest size depends on the chosen company's policy.
Access To More Services
In most cases, the best bank accounts for small businesses include additional services for more convenience. It can be a Quick Deposit feature that allows you to scan and top-up countless checks or manage multiple currencies in one account. Besides, numerous banks offer flawless mobile apps for effortless financial management.
Protect Personal Assets
As a business owner, you should be ready for potential risks, like going into debt, facing lawsuits, or other economic difficulties. Therefore, having a separate business account may protect your personal assets if something goes wrong with your startup.
Legal Requirements
In case you plan to run your business as a legal entity, like the IRS or LLC, you must separate your bookkeeping and checking accounts from your personal spending. If you do not meet this requirement, it may provoke legal issues.
Small Business Bank Accounts Vs. Personal Bank Accounts
Commonly, the best small business banking accounts have several distinctions from personal ones. Thus, personal types allow you to transfer funds, deposit, cash out money, and utilize debit or credit cards for your personal needs, like entertainment, housing, and traveling.
When it comes to business checking accounts, they are designed only for business purposes. Thus, you can also deposit, track your cash flow, and withdraw money, but you need to use these funds only for business goals. Keep in mind that business accounts may include additional features like merchant payment processing, payroll processing, the availability of employee debit or credit cards, and receive other payment solutions.
How To Choose The Best Small Business Bank AccountSince a wide range of banks provide financial services for startups, you need to consider numerous aspects before picking a suitable option. In our review below, we uncover crucial nuances that you need to consider in choosing the best small business banking account. For instance, it can be fees, rates, ATM network, deposit requirements, and other aspects.
Look For Low Or No Minimum Balance Requirements
As known, some financial institutions may require a minimum deposit before opening an account. Still, not all startups have the budget for balance replenishment for the first time. Therefore, you may prefer banks that do not require the first deposit or require small amounts for the account top-up (no more than $1,000).
Compare Monthly Maintenance And Transaction Fees
Of course, you need to compare monthly maintenance fees and transaction commissions offered by the best online banks for small business development. It seems obvious that you need to prioritize a more reasonable proposal (for instance, 0-1% for online transactions) to save your budget and prevent excessive money losses.
See If The Bank Offers Free Checking
We also recommend considering an opportunity to write a certain number of free paper or electronic checks monthly. Since some banks may limit this feature, you should review this aspect before opening your business account.
Look For A Bank With An Extensive ATM Network
When you seek the best bank for small business account creation, picking options with an extensive ATM network is better. Since your business may have a necessity for making cash deposits and/or checks, it would be much more effortless to cooperate with a bank that has a wide range of ATMs located near your office or home.
Moreover, if your business involves regular traveling, take a look at the ATM network across the required areas. Thus, you can save your time and money on commissions that could be spent on other banks' ATMs.
Evaluate Online Banking And Mobile App Options
Do not forget to check the availability of a mobile app for online payments proposed by the chosen financial company. The best bank for small business accounts should provide an opportunity to pay online via your smartphone, follow your revenues and expenses, pay salaries to employees, and track all transactions in one place. It can be a mobile app or a flawless browser-based account version.
See What Interest Rates They Offer
If you are looking for an interest-bearing best business bank account for small business, we advise comparing the rates of several banks. Namely, check out whether the APY interest meets your expectations to have a chance to earn on your deposit accounts.
Check If They Offer Account Security Options
The best bank accounts for small businesses must guarantee advanced security and fraud prevention. Particularly, the robust protection methods include two-factor or multifactor authentication, continuous account monitoring, and the use of solid 128-bit or 256-bit data encryption systems.
See What Other Business Services Are Available
When you look for the best checking account for small businesses, verify if the selected option provides additional services. Namely, you should consider the opportunity to pay international bills via your account, use quick deposit features, or sync your account with Quickbooks, Shopify, Slack, and other services. Moreover, check the availability of the customer service.
Opening A Small Business Bank Account Step-By-Step
Well, now you know how to opt for the best bank for small businesses and can move on to account creation. We have crafted a bit-by-bit guide that will help you accomplish this procedure:
- Choose a bank. Compare several proposals, focusing on your business needs.
- Gather the required documents. You need to prepare such documents as an employer identification number (EIN), a doing business (DBA) certificate, business licenses, etc.
- Set an appointment to open the account. If you select a bank with brick-and-mortar branches, you need to arrange a meeting with the manager on a certain date and time.
- Apply for the account opening. You may go to the branch and hand over your documentation to a bank representative or send the application via email.
- Finish account paperwork. The bank's managers may ask you to provide identity documents and prove sources of business capital to accomplish the verification process.
- Make your opening deposit. If the bank requires a minimum deposit for using the account, you should top up your balance.
- Link other services. Integrate all your business tools with your checking account (for instance, payment processing services like Stripe, PayPal, etc).
- Activate your account. When the company completes all verification processes, you can use your account.
- Notify important parties. Provide your business account address to clients and investors for further cooperation.
Best Small Business Bank Accounts Reviewed And Compared
Best For Startup Development
Chase Business
Minimum deposit to open: $0
Minimum balance: $0
Business perks: Monitoring employees' debit cards, indicating their limits
Fees: $34 with an opportunity to waive
Mobile check deposits: Yes
Special Offers: a $400 bonus for new Chase Business Complete Checking accounts
ATM fees: $0
Chase Business Complete Banking is the best online bank for small business owners who want to grow and receive additional perks. The financial company offers an exclusive $400 reward after new account registration. Besides, it guarantees no monthly fees if you maintain a daily budget of $2,000.
Moreover, Chase Business Complete Banking provides QuickAccept and QuickDeposit functions. Due to these features, you can efficiently receive payments via a mobile card reader by using the QuickAccept in the Chase app. QuickDeposit enables you to scan up to 50 checks at the same time.
Pros:
- QuickAccept feature for in-moment payment processing
- You can deposit up to $5,000 per online transaction
- Account replenishments are available without the need to go to the physical branch
- Chase business debit cards offer a daily limit for spending of up to $10,000
- A few ways to avoid the monthly fee
Cons:
- You need to pay for in-person paper check ($0.40 per each)
Best For LLCs And Sole Proprietors
Novo
Minimum deposit to open: $0
Minimum balance: $0
Business perks: You will get easy integration with Shopify, Stripe, Quickbooks, Slack, and other business services.
Fees: $0
Mobile check deposits: Yes
Special Offers:
- After business account registration, you will receive up to $3,000 in Google Cloud credits
- Additional $150 for Google Ads
- Link your checking account with Stripe and claim up to $20,000 for credit card use without fee
ATM fees: up to $7 per month
Novo is one of the best small business bank accounts for clients who plan to provide unrestricted daily transactions. Besides, you do not need to make a minimum deposit to create an account and may count on no monthly fee. The Novo bank provides unique tools for issuing an unlimited number of invoices to your clients.
Still, there is a small disadvantage we should note about. You can make deposits with Novo Business Checking only via the mobile application, as cash replenishments are unavailable.
Pros:
- Monthly online transactions without limits
- No minimum deposit need
- No service fees
- Straightforward integration with Google Pay and Apple Pay
Cons:
- Cash deposits are unavailable
Best For Small Business Owners
Bluevine Business
Minimum deposit to open: $0
Minimum balance: $0
Business perks: Two free checkbooks
Fees: $0
Mobile check deposits: Yes
Special Offers: No
ATM fees: $0
You can open the best small business checking account by using Bluevine's proposals. Namely, you may count on no daily or monthly fees, no online transaction limits, and no ACH commissions. Do not overlook an opportunity to boost your earnings with Bluevine's interest (up to 4.25% APY).
Beyond that, Bluevine furnishes efficient deposit checks via smartphones, allowing you to benefit from digital payments with no need to go to the bank branch. However, if you need to use ATMs, you may utilize the MoneyPass ATM network. It's a suitable feature as you can find over 38,000 ATMs across the United States.
Pros:
- No need to pay monthly or daily fees
- Solid security measures with the opportunity to lock and unlock your debit card
- Connection with PayPal, Expensify, and other business tools
- No restrictions for monthly and daily transactions
Cons:
- Using out-of-network ATMs includes extra fees
- Cash deposits limited to $500 per transaction
Best For Startups
EverBank
Minimum deposit to open: $1,500
Minimum balance: $0
Business perks: Free debit card
Fees: $0
Mobile check deposits: Yes
Special Offers: No
ATM fees: $0
You may also look at EverBank, as it provides the best small business bank account options as well. When you become an EverBank client, you get a free debit card and may count on ATM fee refunds and mobile check deposits. Thanks to the convenient application, you can quickly perform a wide range of transactions without the need to go to the physical branch. However, if you need to use the ATM, you can find over 100,000 options across the US.
Pros:
- No monthly commissions for your business account
- No ATM fees or overdraft
- The bank pays high annual interests
Cons:
- No exclusive offers for business owners
Final Thoughts
The selection of the best small business checking account allows you to develop your startup legally according to current legislation. Thus, you will not have issues with the tax service and bookkeeping. Plus, you can separate your personal funds from business capital, effortlessly accept payments from your clients, pay salaries to employees, and scale your business. Besides, if you need to get a loan, you may count on more approvals from lenders.
Business accounts allow you to introduce your company as a solid one and get more proposals for cooperation. You may conduct your activities without additional worries.
